LyondellBasell on course for 2030 emission targets, but not net zero by 2050

• LyondellBasell (LYB) is on target to meet its 2030 emission target, but not net zero by 2050.
• The management has made commitments to investors which includes selling at least 2 million tonnes of recycled or renewable polymers by 2030, about 20% of current sales.
• However, the company has no Scope 3 target for post 2030. Presently, Scope 3 accounts for over 80% of total emissions.
• LYB is targeting net zero Scope 1 & 2 emissions by 2050. The pathway is vague and will “require the deployment of new technologies across the company’s manufacturing footprint”. Most of these new technologies are unproven in commercial applications.

London 10 November 2023: LyondellBasell has a short-term climate transition plan which is much more credible than many of its CA100+ chemical sector peers. As a result, it is on target to meet its 2030 emissions target.

Beyond this date, however, there is a lack of clarity, making it difficult for investors to understand how it will achieve its net zero target by 2050.

Among factors causing concern post 2030 are the lack of a Scope 3 target and a vague pathway for Scopes 1 and 2. LYB itself notes that the 2050 Scope 1 & 2 net zero target will “require the deployment of new technologies across the company’s manufacturing footprint”. Most of these new technologies are unproven in commercial applications.

LYB purchased 46.8 million tonnes of feedstock in 2021, i.e. base chemicals that are turned into plastics, all derived from oil and natural gas. This has an implied CO₂e footprint of about 140 million tonnes. There is no detailed plan to replace all this feedstock with recycled or renewable alternatives post 2030, although LYB has announced plans to sell at least 2 million tonnes of recycled or renewable polymers by 2030, which is about 20% of currently sales.

Although LYB is a transition leader in the chemical sector, surprisingly the CEO has little financial incentive to deliver on reduced carbon levels. About 3% of the executive compensation can be attributed to sustainability metrics.

John Willis, Planet Tracker’s Director of Research commented: “We recognise that LyondellBasell’s  emission targets are among the most ambitious in the sector, for which it should receive credit. The company often talks about its carbon transition strategy, stating that it finds it “challenging” to estimate Scope 3 emissions and it publicly discloses its dependence on the deployment of new technologies across the company’s manufacturing footprint. We note that the company belongs to numerous industry groups and publishes an assessment of whether each group is aligned with LYB’s climate position. We admire this level of transparency.’.

The Climate Transition Analysis of LyondellBasell is part of a series examining the climate transition plans of sectors on the Climate Action 100+ list. Previous analyses have revealed transition deficiencies in companies like BASF,  Bayer and Dow, further underscoring the urgency for effective Scope 3 emissions reduction. Planet Tracker also released a thematic analysis encompassing FMCG giants in the Food, Home Care and Personal Care sectors covered by CA100+.

The report can be downloaded in full here.

ENDS

For more information please contact:

Dominic Lyle, Planet Tracker| t: +44 7484 654941 | dominic@planet-tracker.org

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Planet Tracker is a non-profit financial think tank producing analytics and reports to align capital markets with planetary boundaries. Our mission is to create significant and irreversible transformation of global financial activities by 2030. By informing, enabling and mobilising the transformative power of capital markets we aim to deliver a financial system that is fully aligned with a net-zero, nature-positive economy. Planet Tracker proactively engages with financial institutions to drive change in their investment strategies. We ensure they know exactly what risk is built into their investments and identify opportunities from funding the systems transformations we advocate.

PLANET TRACKER’S CLIMATE TRANSITION ANALYSIS – CHEMICAL COMPANIES

As part of its material system transition programme, Planet Tracker is examining the transition plans of the chemical companies covered by the Climate Action 100+ list   (https://www.climateaction100.org/whos-involved/companies/). Our goal is to provide investors with the key information and analysis they need to be able to hold chemical companies to account for the quality of their climate transition plans and their execution against those plans, and to encourage them to use this information to engage effectively with these companies with the ultimate aim of driving the sustainable transformation of the chemical sector.